Tag Archives: CBO

CBO: national debt will rise to $30 trillion in the next decade

Democrats took control of government spending in 2007
Democrats took control of government spending in 2007

The Washington Times has a warning for all the young voters who are freaking out over the spending promises of Hillary Clinton and Bernie Sanders.

Here it is:

The federal government will be flirting with $30 trillion in debt within a decade, the Congressional Budget Office reported Monday, blaming an aging population, new spending and tax cuts approved on Capitol Hill, and the growing burden from Obamacare for erasing the progress Washington had made over the past few years.

Analysts said Obamacare will chase more workers out of the labor force over the next five years, adding pressure to an economy still struggling to spring to life more than seven years into the Obama recovery.

The Affordable Care Act itself is still struggling to attract a customer base, the CBO said, lowering its estimate for the number of people who will sign up for the exchanges from 21 million to 13 million — a drop of nearly 40 percent in projections. Customers collecting taxpayer subsidies this year will be 11 million, down from the 15 million the CBO projected a year ago.

[…]Deficits will continue to rise over the next 10 years, topping $1 trillion again in 2022 and reaching $1.4 trillion in 2026, the analysts said.

Basically, we’ve dug ourselves into a whole with all this spending – taking money out of the productive private sector and giving it to the wasteful public sector.

How wasteful?

This wasteful:

The National Aeronautics and Space Administration is spending $80,000 to see what effects space flight has on oral herpes.

The federal space agency has awarded multiple grants and contracts to a researcher at the University of Florida to determine the “Effect of Spaceflight on Herpes virus Genome Stability and Diversity,” beginning last summer. The project recently received an additional $15,000 in December.

“The goal of this study will be to determine the changes in the genomic and mutational diversity that is present in the Herpes virus virome present in astronaut saliva and urine samples collected before, during, and after space flight,” according to NASA’s description of the research. “Ground subjects will serve as the control group providing saliva and urine samples preflight and postflight during the same schedule as the astronauts.”

That $80,000 was taken from private sector businesses and individual families. They could have spent it on jobs, innovation or consumer spending. But instead the government took it and wasted it on garbage.

Texas Senator Ted Cruz
Texas Senator Ted Cruz

There is someone who has a plan to deal with these deficits. And his plan is to shut down or scale back many government departments.

Ted Cruz:

For the individual income tax under his tax reform, Cruz’s plan provides for one flat rate of 10% on everything – wages, capital gains, dividends, personal business income, rent, interest, and all other forms of individual income. The corporate income tax would be abolished, and replaced with a 16% Business Flat Tax, which applies to sales of goods and services, minus all purchases and expenses for inputs for production. It automatically provides for immediate “expensing,” or an immediate deduction for all purchases of plant and equipment, and all other capital investment, which inherently involves purchases of inputs from other businesses. It is essentially a consumption tax for business.

That net business tax, which also automatically abolishes all special-interest, corporate-welfare loopholes, raises an enormous amount of revenue, $25.4 trillion over the first 10 years alone. This enables the plan to include abolishing the Social Security and Medicare payroll tax, which is the highest tax most working people pay, with Social Security and Medicare financed in full. It also enables the plan to include abolishing the death tax, the Alternative Minimum Tax, and all Obamacare taxes, as well as the corporate income tax. With a standard deduction of $10,000 per adult, and a $4,000 personal exemption, the first $36,000 of income for a family of four would be exempt from all significant federal taxes.

Because such tax reform would be enormously pro-growth, the Tax Foundation scores it on a dynamic basis as a net tax cut of $768 billion over the first 10 years. The Tax Foundation, which has developed a formal, sophisticated, and thorough economic model of the economy, estimates Cruz’s tax reform would create nearly 5 million new jobs, increase wages by 12%, and increase real economic growth over the next decade by nearly 14% more than under current tax policies. The after tax income of all workers would increase by 21.3% on average, with those in the bottom 20% of the income ladder seeing income increases of 15.3%.

Cruz intends to pay for these tax cuts by reducing the size and scope of government – pushing many federal responsibilities down to the state level, where there is more accountability to the people.

The four agencies are the standard four that most conservatives want to abolish or streamline:

  • Department of Energy (raises energy prices for individuals and businesses)
  • Department of Commerce (hands our taxpayer money to businesses favored by big government)
  • Department of Education (indoctrinates children in big government dogma, e.g. – global warming)
  • Department of Housing and Urban Development (caused the housing bubble recession by forcing banks to loan money to unqualified individuals, then bailed them out with taxpayer money)

Many other smaller government departments would be streamlined or eliminated. There would be a hiring freeze in the federal government, and pay increases would be based on merit, not tenure. Cruz would also save a trillion dollars over 10 years by repealing Obamacare, and replacing it with a consumer-driven alternative.

Although young people are in love with the idea that government will give them things by taxing others, that’s not sustainable. They ought to be voting for someone who wants to cut spending and cut government.

New study: Obamacare will decrease workforce by 2 million full-time worker’s hours

He voted for Obamacare, and he got it

He voted for Obamacare, and he got it… good and hard!

The study was done by the non-partisan Congressional Budget Office (CBO), and reported by Fox News.


ObamaCare will reduce work hours equivalent to 2 million jobs in the next decade amid a host of incentives not to work or to work less, a new Congressional Budget Office (CBO) report says — the latest blow to President Obama’s signature health insurance plan.

The report estimates the Affordable Care Act, or ACA, will make the labor supply shrink by 0.86 percent in 2025. This amounts to a shrinkage equivalent to approximately 2 million full-time workers.

The nonpartisan CBO estimates that the decline will come primarily due to workers responding to changes made by the law to federal programs and tax policy. The agency points to the introduction of health care subsidies tied to income as a key factor — which in turn raises effective tax rates as someone’s earnings rise, therefore reducing the amount of work Americans choose to do.

“Subsidies decline as income increases, reducing the return on earning additional income,” the report says. “That decline is effectively an increase in recipients’ effective marginal tax rate, so it generally reduces their work incentives through the substitution effect.”

Since the subsidies also reduce the burdens attached to unemployment, the CBO predicts that the law will create additional “work disincentives” for those who are unemployed for part of the year. It concludes that the exchange subsidies will contribute to half of the overall reduction of the labor supply.

The report also points to direct taxes, such as ACA’s hike of the payroll tax on high earners for Medicare’s Hospital Insurance Program, as a reason for discouraging some from working. Another pressure on wages will come from the employer mandate, which imposes a penalty on employers if they have more than 50 employees and do not provide insurance. The CBO predicts that within a few years this charge will be passed on to employees in the form of lower wages.

[…]The report comes at an awkward time for the Obama administration: just days after the Senate passed a bill that would repeal key parts of the law. The White House has said that President Obama will veto the legislation.

Oh well. It’s not like workers need to be paid fairly for their labor, right? I’m really not seeing how Obama expects the next generation to pay for the $10 trillion he’s added onto the national debt. If they are working less, then they are paying less in taxes. It’s fun to give speeches where you promise your gullible supporters a lot of goodies, but then, if the goodies discourage their employers from giving them work hours, then how will the spending be paid for?

More than anyone in modern politics, Barack Obama is a man who has perfected the art of sounding confident about things he literally knows nothing about. When elect a clown, you get failure. It doesn’t matter how confident a candidate sounds. It matters whether he has a record of solving the problems that he is talking about. Results, not rhetoric.

Obama said Obamacare would not add to the deficit, CBO says it adds $1.35 trillion

In the video above, Obama promised the American people that his health care plan would not add one dime to the deficit. And the low-information voters who voted for him believed him. Just like they believed that they could keep their doctor, that they could keep their health care plan, that Obamacare would lower the costs of health care, that Benghazi was caused by a YouTube video, and so on.

So how much did Obamacare add to the deficit?

The UK Daily Mail has the latest numbers from the Congressional Budget Office.


It will cost the federal government – taxpayers, that is – $50,000 for every person who gets health insurance under the Obamacare law, the Congressional Budget Office revealed on Monday.

The number comes from figures buried in a 15-page section of the nonpartisan organization’s new ten-year budget outlook.

The best-case scenario described by the CBO would result in ‘between 24 million and 27 million’ fewer Americans being uninsured in 2025, compared to the year before the Affordable Care Act took effect.

Pulling that off will cost Uncle Sam about $1.35 trillion – or $50,000 per head.

The numbers are daunting: It will take $1.993 trillion, a number that looks like $1,993,000,000,000, to provide insurance subsidies to poor and middle-class Americans, and to pay for a massive expansion of Medicaid and CHIP (Children’s Health Insurance Program) costs.

Offsetting that massive outlay will be $643 billion in new taxes, penalties and fees related to the Obamacare law.

That revenue includes quickly escalating penalties – or ‘taxes,’ as the U.S. Supreme Court described them – on people who resist Washington’s command to buy medical insurance.

It also includes income from a controversial medical device tax, which some Republicans predict will be eliminated in the next two years.

If they’re right, Obamacare’s per-person cost would be even higher.

Did Obama know that he was lying when he said that his health care plan would not add one dime to the deficit?

Well, his buddy Gruber, the architect of Obamacare, certainly did:

But we should not be surprised, either by the low intelligence levels of Democrat voters or by the lies of Democrat politicians. After all, they want single payer health care – look what Harry Reid says:

“What we’ve done with Obamacare is have a step in the right direction, but we’re far from having something that’s going to work forever,” Reid said.

When then asked by panelist Steve Sebelius whether he meant ultimately the country would have to have a health care system that abandoned insurance as the means of accessing it, Reid said: “Yes, yes. Absolutely, yes.”

And they know – from looking up North to Canada – that single-payer health care will necessarily involve massive increases in taxes.

CTV News describes a recent study on the costs of single-payer health care in Canada:

A typical Canadian family with two parents and two kids will pay up to $11,786 for public health care insurance this year, according to a new study from the conservative think tank Fraser Institute.

Using data from Statistics Canada and the Canadian Institute for Health Information, the Fraser Institute study estimated the amount of taxes Canadian families will pay for public health insurance this year.

What do you get for $11,786?

You get to be on a waiting list for a primary care physician, and you get to wait months for treatment. You can pay taxes your whole life, and then wait behind people who want sex changes – people who have never paid a dime into the system. And sometimes, you die while waiting for treatment. That’s “fairness” and “equality”. And that’s where the Democrats want to take us.

Remember when Obama said that we could keep our health care plans and our doctors?:

Democrats voters looked at this man, and they just knew – without any studies or any evidence – that he was telling the truth.

But the Congressional Budget Office says that TEN MILLION people will lose their employer health plans under Obama by 2021.


The Congressional Budget Office now says ObamaCare will push 10 million off employer-based coverage, a tenfold increase from its initial projection. The “keep your plan” lie just gets bigger and bigger.

The latest CBO report is supposed to be a big win for the Obama administration because the projected costs are 20% below what the CBO first projected in 2010.

But the CBO report also shows that ObamaCare will be far more disruptive to the employer-based insurance market, while being far less effective at cutting the ranks of the uninsured, than promised.

Thanks to ObamaCare, the CBO now expects that 10 million workers will lose their employer-based coverage by 2021.

This is in addition to the FOUR MILLION who already lost their health care plans in 2013.

CBO report: Social Security to be bankrupt by 2030

From Investors Business Daily.

Full text, because this matters:

The $2.8 trillion Social Security Trust Fund is on track to be totally spent by 2030, the Congressional Budget Office said Tuesday.

That’s one year earlier than projected in 2013 and a decade earlier than the CBO estimated as recently as 2011.

The CBO delivered the warning in a gloomy long-term budget outlook that shows federal debt reaching 106% of GDP in 25 years, up from 74% now.

The rising debt would come despite revenue rising by 1.8 percent as share of GDP (from 17.6% to 19.4%)from 2014 to 2039 and despite spending other than health entitlements, Social Security and debt service shrinking by 2.5% of GDP (9.3% to 6.8%).

The challenge: Health care spending will rise by 3.1 percent of GDP (4.9% to 8%) and Social Security 1.4 points of GDP (4.9% to 6.3%), which will in turn push interest on the debt up to 4.7% of GDP from 1.3%.

Social Security’s cliff, now just 16 years away, is one that Washington would be crazy to approach. At that point, incoming revenue would be enough to pay less than 75% of scheduled benefits for all beneficiaries, whether just reaching retirement or 100 years old.

Up until the point of exhaustion, the trust fund provides legal authority — though no resources — for the government to pay all benefits despite Social Security’s burgeoning cash-flow deficit, which the CBO expects to reach $320 billion in 2024 alone.

The rapid deterioration in Social Security’s finances has a number of contributing factors. The drawn-out recovery from the deep recession and the extended period of low interest rates have sapped revenue and lowered the interest that Treasury pays to the trust fund based on program surpluses from 1984 to 2009.

On top of that, the CBO expects the underinvestment and long-term unemployment associated with the less-than-stellar recovery to have a lasting impact, boosting the natural rate of unemployment.

In February, the CBO significantly reined in its economic optimism, slashing its projection of the total amount of wages and salaries over the 2015-2023 period by about $3.2 trillion, or 3.6%.

Among the factors that the budget scorekeeper cited was ObamaCare’s work-diminishing effect, which the CBO now estimates to be three times as large as it supposed in 2010.

The CBO said that ObamaCare would reduce employment by 2 million full-time-equivalent workers in 2017, rising to 2.5 million in 2014.

This reduction would result in a decline in aggregate employee compensation averaging 1% from 2017 through 2024, or $1.05 trillion.

An IBD analysis pegged the revenue hit to Social Security from ObamaCare work disincentives at about $120 billion through 2024.

The reduced payroll-tax contributions into Social Security would, over time, result in modestly lower benefits for those who choose less work, but the cost savings from reduced benefits would offset only a portion of the lost revenue.

The nature of Affordable Care Act subsidies — they rise as income falls and decline as income rises — will make work “less attractive” by “creating an implicit tax on additional earnings,” the CBO said.

The work disincentive will lead some people to choose to work less, in part because subsidized health care will enable them to get by with less work.

In addition, the CBO expects ObamaCare to depress wages for lower earners when employers, over time, pass along the cost of the law’s employer-insurance mandate by holding back on wage increases. Lower wages, in turn, will provide another reason for some people to opt for less work, the CBO says.

While the CBO expects compensation to be lower “almost entirely” because people will choose to supply less work, the CBO also expects that some employers “will respond to the penalty by hiring fewer people at or just above the minimum wage.”

Another important factor clouding Social Security’s future: A greater share of earnings goes to those with income above the maximum subject to payroll taxes ($117,000 in 2014).

As a result, while rising longevity and the retirement of baby boomers will make benefits grow faster than the economy, Social Security’s tax revenue is expected only to keep pace with economic growth.

Look. I think there’s practical wisdom in this CBO report for Christians. We have to take into account data like this when making our life plans. And it’s not only Social Security we need to be scared of, Medicare is even MORE insolvent than Social Security. If you are under 40, these programs are not going to be there for you. You have to make other plans. You can’t be running your life plan as if these threats do not exist, because they do. Now I want to talk about how a defensive plan can be better than an offensive plan.

The neutral zone trap

Think of ice hockey and the neutral zone trap defense:

The defending team sets up so four players-usually both wings and both defense-remain in the neutral zone, while the center forechecks into the offensive zone. The center’s job is to block the passing lanes from the puck carrier, forcing him to carry the puck forward into the neutral zone. Once the puck carrier reaches the neutral zone, the center stays toward the center of the ice, forcing the puck carrier along the boards. Two of the other defending team’s players collapse in on the puck carrier, forcing him to dump the puck into their zone, forcing a turnover.

This plan allowed the New Jersey Devils to win the Stanley Cup against the high-powered Detroit Red Wings in 1995:

The following season, shortened by 34 games because of a lockout ordered by NHL owners, the Devils entered the playoffs as the No. 8 seed in the conference, with only a 22-18-8 record. In the West, the Detroit Red Wings looked invincible, cruising to the Stanley Cup Finals behind a galaxy of offensive stars.

But that’s when Lemaire went to work, putting his Devils through daily lessons in the trap, preaching constantly about being in the right defensive position at all times. It was hard, but it worked. The Devils upset three higher seeded Eastern teams to get to the Stanley Cup Finals, but remained prohibitive underdogs against the Red Wings.

Many predicted a sweep – and that’s what happened. What nobody predicted was that it would be the Devils who did the sweeping, thanks to a stifling trap that limited Detroit to seven goals in four games.

“They frustrated the heck out of us,” former Red Wings defenseman Mike Ramsey told the St. Paul (Minn.) Pioneer Press. “You weren’t trying to beat one guy. You were trying to beat four. They had enough talent and size where they didn’t have to play that way. But they knew what they were doing. Every player was on the same page.”

When coaches across the NHL saw how Lemaire was able to totally shut down such a great offensive team, the trap began to be copied by almost everyone. Roger Neilson had implemented a form of the trap with the expansion Florida Panthers from 1993-95, and his successor, Doug MacLean, took it even further. The neutral zone became almost impossible to navigate against the Panthers in the 1996 playoffs, and Florida suddenly found itself in the Stanley Cup Finals against the offensive-minded Avalanche. Criticized by the media about the trap, MacLean responded, “I like boring”.

Yes, and he likes winning,too. Sometimes people who appear to be risk-averse seem “scared” to others… but what matters is the scoreboard.

I hate to see young people making life plans while ignoring real life obstacles. The national debt, the demographic crisis, fertility (for women), etc. are real problems. Let’s take these threats into account when we are planning our lives. It’s just unwise to think that we can do whatever we want and then count on God to bail us out. We need to be practical. We live in challenging times, and we need to have prosperity and stability in order to protect our faith from external threats which are so often the root of despair and apostasy. The score on the scoreboard is not related to who took the biggest chances and felt the most excitement, it’s related to who actually scored. I feel excited when I win.

CBO report: Obama’s proposed minimum-wage increase could kill 500,000 jobs

Three stories from Investors Business Daily, and one of them is about the dreaded stagflation.

First one, on the CBO report.


On Tuesday, the Congressional Budget Office made another blockbuster pronouncement, this one concluding that the White House minimum wage hike to $10.10 an hour really does kill jobs.

The $10.10 option, when fully implemented, “would reduce total employment by about 500,000 workers, or 0.3%,” CBO says. Job losses could be as high as 1 million.

This followed last week’s CBO calculation that the impact of ObamaCare on the labor market will be about 2 million fewer workers over time, due to higher costs on employers and employees of mandated coverage and the availability of subsidized insurance to nonworkers.


Second article, about how the Democrats seem to be trying to create dependency in order to buy votes from people who cannot pay their own way.


January’s labor report confirmed yet another month with over 100 million Americans not working. In fact, more than 100 million Americans have not been working in Obama’s workers’ paradise for all of 2012 and 2013, a unique achievement in American history.

[…]How has Obama managed to “liberate” so many workers from work? Through Social Security disability, which has increased by more than 21%, extending “unemployment” benefits to two years and by eliminating work requirements as a condition of receiving federal benefits.

The number of Americans on food stamps has soared by 50% under Obama to close to 50 million, largely because work requirements, asset checks and other restraints on abuse have been relaxed. Indeed, more than twice as many more Americans have gotten food stamps under Obama than have gotten jobs. Under ObamaCare, the same transformation is now under way for Medicaid.

Today, federal and state taxpayers pay a trillion dollars every year to the lowest 20% on the income ladder basically not to work. Under Obama total welfare spending has doubled since 2008. (Note that the administration is suing the state of Louisiana to turn over the names of everyone on welfare, precisely for Obama’s voter-turnout database.)

[…]CBO estimates that the slower economic growth from this reduced labor supply will mean $1.4 trillion less in federal tax revenue over the next 10 years. So ObamaCare will increase the deficit after all.

Third article, explaining that the failed policies of the Democrats have been tried before – by Carter.


Since the Obama “recovery” started 4-1/2 years ago, inflation appears to have been relatively tame, with core prices climbing just 7% from June 2009 to December 2013.

But as CBS News discovered when it looked a little closer, the overall number is deceptive. In fact, it found food prices soaring.

The official inflation data confirm this. Overall, food prices are up 9% since June 2009, according to the Bureau of Labor Statistics. And the cost of many staples is skyrocketing. Pork prices have climbed 14%; poultry is up 12%; eggs, 27%; milk, 20%.

Meanwhile, energy prices have climbed 18% during the recovery, and the price of gasoline is up a whopping 31.5%. Then there’s college tuition, up 23%.

At the same time, wages aren’t budging. In fact, measured in real terms, the median household income is 4% below where it was four-1/2 years ago. And while the official unemployment rate is down, that’s due to millions quitting the workforce altogether.

Yes, the economy has created 6.6 million jobs since June 2009. But the ranks of those not in the labor force climbed nearly 11 million, driving the labor force participation rate down from 65.7% to today’s 63% — a level not seen since 1978.

You might remember from the Carter era that stagflation was the name given to describe a period of slow or stagnant economic growth, low labor force participation and high prices (inflation). The only solution to this is to raise interest rates, which is very painful. But the longer we keep interest rates low, and keep government spending high, and keep taxing and regulating businesses into oblivion, the worst the medicine is going to be when we are forced to take it.

…integrating Christian faith and knowledge in the public square

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